UK enjoys record-breaking year with 5.11bn spent on video games in 2017

Valuation by trade body UKIE shows digital games market exceeded 1.5bn for the first time ever

By James Batchelor.Published Friday 2nd March 2018, 5:00am GMT

Consumer spending on games and gaming services reached an all-time high in the UK last year at 5.11 billion.

The figure will be announced by trade body UKIE during its annual games market valuation event in London today, and encompasses not only sales of software and hardware, but also peripherals, merchandise, events and more.

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Total revenues were up 12.4 per cent over 2016 and flew in the face of nationwide statistics, with overall UK consumer spend reportedly down 0.3% year-on-year.

The biggest growth area was PC games hardware, up 51 per cent year-on-year from 249 million to 376 million. This was attributed in part to the growth of virtual reality and its higher graphics requirements, with more than 100 million spent on VR headsets for the first time.

Spreading adoption of 4K monitors and games also contributed, while a minor boost may have stemmed from the recent surge of interest in cryptocurrency, which has seen miners investing in high-end GPUs.

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Console hardware was the second largest growth area, led in part by the launch of the Nintendo Switch but also the ongoing success of market leader PlayStation 4. In fact, GfK's senior client insight director Dorian Bloch reports this was the fourth consecutive year in which PS4 sold more than one million units in the UK.

The segment grew by 29.9 per cent year-on-year, with revenues up from 507.5 million to 659.3 million, and accounted for nearly half of all hardware revenues.

Software remains the biggest money driver, accounting for 3.56 billion of total spending - up 8.3 per cent year-on-year. The UK is well past the digital tipping point with download and online games for PC and console generating 1.6 billion. Not only is this 13.4 per cent higher than last year's 1.4 billion, it's the first time digital games have been worth more than 1.5 billion in the UK.

SuperData Research senior analyst Carter Rogers added that console and premium PC games accounted for 42 per cent of digital games revenue in the UK. By comparison, this share comes in at 34 per cent in Europe and just 14 per cent worldwide.

Mobile revenues also surpassed 1 billion - 1.07 billion, to be exact - and enjoyed a 7.8 per cent rise over the previous year.

Despite the rise of digital, and the ongoing decline of physical retail, boxed sales are actually up by 3.1 per cent compared to last year, bringing in 790.5 million. This does not include the 101.1 million generated by pre-owned software - which was actually 15.1 per cent lower than 2016.

Last year, UKIE revealed via GamesIndustry.biz that more than half of all money spent on physical games went towards PlayStation 4 games, making 2017 the first year on record where a single platform took more than 50% of all boxed sales revenue.

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Beyond the sale of games and hardware, revenues generated by the gaming culture are actually down slightly, slipping by 1.9 per cent to 117 million.

Toys and merchandise remain the biggest earner in this area, with sales up 6.8 per cent to 72.9 million, despite decline in the general toys market. Events and venues enjoyed the most growth at 13.4 per cent, with revenues up to 8.5 million.

The latter is still lower than the 18 million generated by books and magazines, as well as the 17.6 million spent on movies and soundtracks. However, these two segments both saw decline in 2017 at 2.3 per cent and 29.9 per cent respectively.

Interestingly, this is the first year that UKIE has been able to include UK box office revenues as well as home sales for movies. However, 2017 suffered from a lighter line-up of silver screen games-based outings than 2016, which saw the release of the Warcraft movie, Ratchet & Clank and The Angry Birds Movie.

The data was compiled with the help of GfK, NPD, Superdata, Kantar Worldpanel, Nielsen, ABC, the Official Charts Company and the British Film Institute. You can see a full breakdown below:

Read article on GamesIndustry.biz